Every season, New York City comes to life with Fashion Week, where buyers and fashionistas get a sneak peek of the 'must-have' outfits they'll need and what they can expect to see in the stores six months later. But the clothing company Tommy Hilfiger bucked tradition in the fashion industry by making its collection available to everyone the moment they hit the runway through TommyNow, the brand's "see now, buy now initiative."

Companies are spending more money that ever on innovation. The top 1,000 companies globally grew R&D spending at a 6% CAGR between 2012-2017, from $361 billion to $456 billion. And this trend to spend is expected to continue.

Of the companies we surveyed:

said most of their investments would be on incremental innovation.

see innovation as "an ad-hoc creative process," a matter of inspiration that happens by change.

It’s simply not enough to implement incremental innovation with help from technologies and expect enterprise-wide impact.

In contrast, high-growth companies unlock trapped value by applying innovation not only to create new products and services for customers, but to achieve deep organizational change. They are not afraid to challenge and redefine their existing ways of doing business.

And they expect it to pay off. Most high-growth companies focusing innovation investments across seven key company characteristics predict 16%+ increase in profit growth CAGR over the next five years.

Seven Key Company Characteristics to Unlock Value

Embracing hyper relevance to reimagine the customer experience

High-growth companies can sense and address the changing needs of customers. They’re more skilled than their peers when it comes to customer collaboration during the innovation process, personalizing touch points and engagement, and using design thinking to design products that revolve around the customer experience.

65%

of high-growth companies plan to collaborate with customers during the innovation process, compared to 54% of other companies.

62%

of high-growth companies plan to personalize customer interactions, compared to 49% of other companies.

Instead of making customers wait months to buy the latest styles, Tommy Hilfiger has decided to make them available immediately.

The brand overhauled its supply chain. It then restructured its relationship with a global supply chain manager to ensure the brand could meet the surge of demand during and after Fashion Week.

The result? Tommy Hilfiger customers could order clothes through the label’s digital platforms and event live-streams, releasing a new look to online viewers in real-time. The brand also created AI-chatbots on Facebook Messenger that could act as virtual stylists.

Tommy Hilfiger’s new buying experience set it apart from some of the competition and helped the company become hyper-relevant by addressing the ever-evolving demands of customers who want an on-demand experience.

Using technology to propel business innovations

of high-growth companies plan to ensure key executives advocate and drive the adoption of new tech, compared to 51% of other companies.

of high-growth companies plan to invest in technologies that lead to higher rates of innovation, compared to 54% of other companies.

Our survey found they’re also stronger when it comes to ensuring leadership advocates, driving the adoption of new technologies and building technical infrastructure to facilitate external collaboration.

Take Industrial Light & Magic and Lucasfilm, which joined forces to create a Digital Backlot to help storytellers, creatives and designers working on the Star Wars franchise. The Backlot, akin to a real-world Wookiepedia, enabled different partners and platforms, like movies and games, to use assets developed elsewhere.

Here’s how it works: Using the Digital Backlot, a creature from Episode VIII could be sketched and built as a puppet by a company, like Pinewood Studios. It could then be 3D scanned and finished in computer graphics before becoming a digital file. In turn, a creator at the toy giant Hasbro, could then access that file and use it to design an action figure or add it to a video game.

This allows an ecosystem of storytellers, designers and creatives across different firms - who are working on movies, games, toys and other products - to access, mine and share digital assets and use them to create something new. The result? Continuous innovation.

Leveraging data to drive new product and service innovations

High-growth companies generate, share and apply data to deliver new innovations safely. Of the high-growth companies we surveyed, 65% plan to use advanced analytics over the next five years to discover insights and make recommendations that will ultimately add value to the business. In addition:

59%

of high-growth companies plan to use data to predict customers’ future demands, compared to 47% of other companies.

57%

of high-growth companies plan to use data-driven behavioral insights to influence customers, compared to 48% of other companies.

Consider Chevron, the world’s third largest publicly traded oil producer, which is spending $4.3 billion this year on shale basins. What prompted that decision? Data.

Using a proprietary database of more than five million well attributes, Chevron uncovered a way to make horizontal drilling more efficient. It used insights gained at its offshore wells to reduce the time take to drill a shale well from 27 days, to just 15 days, for longer and more complex wells.

How being asset smart powers an intelligent enterprise

Asset smart companies adopt an intelligent asset and operations management plan, ensuring their businesses run as efficiently as possible. What’s more, of the high-growth companies surveyed, 59% plan to use new-venture vehicles over the next five years, like corporate venture capital and incubators to accelerate innovation. Plus:

of high-growth companies plan to use intelligent process automation, compared to 51% of other companies.

of high-growth companies plan to increase the utilization of their overall asset base, compared to 49% of other companies.

Trillions of dollars-worth of transactions are conducted through financial institutions daily. However, record keeping of these transactions has remained the same for decades as each institution holds its own copy of transaction history. Digital Asset, a blockchain start-up, offered an alternative— a Distributed Ledger Technology, that can create an independently verifiable, single version of a recorded transaction. The result? Streamlined operations and data that can be shared securely, accurately and in real-time.

They are working with their client, the Australian Securities Exchange, to help it become one of the first major stock exchanges to adopt blockchain technology. The Exchange is collaborating with Digital Asset to use blockchain to record shareholders, and clear and settle equity transactions.

How being network powered can accelerate innovation

High-growth businesses harness the power of their partners to deliver truly innovative, breakthrough solutions to customers. In fact, 60% of high-growth companies plan to actively manage their external network over the next five years. In addition:

61%

of high-growth companies plan to use digital technologies to provide products-as-a-service, compared to 51% of other companies.

59%

of high-growth companies plan to use a carefully managed ecosystem to be able to bring the best innovations to customers, compared to 48% of other companies.

What if you could have a pair of sneakers that was personally designed just for you?

That’s what Adidas wanted to answer. For that, it used a network powered approach, leveraging a partnership with Carbon, an additive manufacturing company, to turn the idea of a personalized, 3D-printed sneaker line into a reality.

Carbon’s expertise helped Adidas break down silos in design, manufacturing, process and delivery. Its Digital Light Synthesis system also enabled Adidas to rapidly test new prototypes 10x faster than using other methods, enabling continuous learning and innovation to create the perfect sneaker. What once took eight to twelve months was now achievable in a matter of days.

The result? With Carbon’s partnership, Adidas plans to scale from 5,000 pairs of shoes to 100,000 in just over a year.

With cloud computing and data science becoming increasingly important to its business, AT&T trained its employees and equipped them with new technical capabilities, investing $250 million on professional development programs and more than $30 million in tuition assistance.

The result? Today, AT&T estimates that 140,000 employees are actively engaged in learning new skills that will set them - and AT&T - up for continued success amid the constant state of tech disruption.

How inclusion helps high-growth companies innovate

Another characteristic of high-growth companies is their inclusive approach to innovation and governance – they incorporate a broader range of stakeholders to develop new services that address higher customers’ and societal needs.

Over the next five years:

55%

of high-growth companies plan to work closely with other network partners to develop a responsible supply chain, compared to 51% of other companies.

54%

of high-growth companies plan to create platforms, which encourage consumers and suppliers to generate revenue from their products, compared to 49% of other companies.

Tech and the elderly might not seem like the most natural pair, but tech innovation is now helping to give senior citizens autonomy.

That’s exactly what we did when Accenture’s London Liquid Studio collaborated with the charity Age UK London on building an AI-powered platform on Amazon Web Services to help the elderly manage their well-being.

Acting as a virtual caregiver, the platform can suggest activities to improve physical and mental health, send appointment reminders and provide access to reading and learning materials.

The innovation also considers the patients’ real caregivers with a “Family and Carer” portal, letting them monitor an individual’s progress, see if requests for assistance were made and spot any abnormalities.

Now that you know the characteristics that high-growth companies share, discover how you can put innovation to work to unlock trapped value.